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3.1 I

Statutory individual employment protection distinguishes between manual workers (arbeiders) and salaried employees (bedienden), with the latter enjoying more protection. By the end of 2003, about 38 percent of the dependent workforce benefited from the status of manual worker, 48 percent of the status of salaried employee, with the remaining 14 percent enjoying the status of civil servant.³⁰

For manual workers the statutory notice period depends upon the tenure, shown in Table 3.1. For workers with tenure of less than 5 years, the rules are embedded in legislation. For workers with tenure of more than 5 years, a national collective agreement (IPA CAO No.75) makes the

employment protection more advantageous for the employee (increasing the notice period the employer has to observe, and reducing the period the employee has to respect).

Table 3.1: Statutory notice periods for manual workers

Tenure Employer Employee

For salaried employees with an annual income of less than 26,912 euro (in 2005), the employer’s statutory notice period is three months plus three months for every five years of tenure, as shown in Table 3.2.³¹ Salaried employees, who earn more than this annual income threshold, have to conclude an individual arrangement with their employer, which has to be at least as advantageous as the statutory arrangement for the lower income category. If the employer and employee fail to come to such an agreement, a labour court decides the case. In determining the notice period, the court takes into account the age, the tenure and the wage of the employee. In case the notice periods are not observed, both manual workers and salaried employees are entitled to a severance payment that normally equals the wage that they would have received during the notice period.

30 Data from the RSZ www.rsz.fgov.be/Onssrsz/NL/Statistics/Brochures/Yellow/2003/xls/tabellen_20034_nl_wdn.xls.

31 In case the wage of the salaried employee exceeds 27,597 euro gross per year and individual agreements are concluded at the moment notice is given. These agreements, however, cannot be less favourable than the statutory rule. In case the gross wage is above 55,193 euro the individual agreement can be concluded when the employment contract is negotiated. The clause on notice period in general uses the so-called Clayes formula that takes into account tenure, age, function and wage: (0.88 x years of tenure) + (0.06 x age) + (0.033 x wage) – 1. For example, the notice period for an employee aged 45 and 3 months, with 20 years and 7 months of tenure, and with an annual gross income of 40,000 euro is calculated as follows: (0,88 x 20,58) + (0,06 x 45,25)+ (0,033 x 40) - 1 = 21 months.

Table 3.2: Statutory notice periods for salaried employees

Tenure Employer Employee

less than 5 years 3 months 6 weeks 5 – 10 years 6 months 3 months 10 – 15 years 9 months 3 months 15 – 20 years 12 months 3 months 20 – 25 years 15 months 3 months 25 – 30 years 18 months 3 months 30 – 35 years 21 months 3 months 35 – 40 years 24 months 3 months

Neither the Employment Office (RVA) nor the works council (ondernemingsraad) need to consent with individual dismissals, though after being fired, employees can go to the labour court.³² It is up to the employer to provide proof that the dismissal was not arbitrary. In case that the court judges the dismissal to have been arbitrary, a worker is entitled to a severance pay amounting to 6 months of gross wages. Certain categories of workers (such as pregnant women, sick employees, union delegates and employee representatives) benefit special employment protection.³³

During a trial period, manual workers cannot be dismissed during the first 7 days, but can be dismissed without notice during the second 7 days. For salaried employees the trial period lasts at least one month, and the notice period is 7 days for both employers and employees. Fixed term contracts cannot be terminated before the end of the term. They can only be renewed three times, and the total accumulated length of employment under such contracts may not exceed 30 months.

In 2005, about 8.5 percent of the dependent workforce was employed under such contracts.³⁴

3.2 C

Belgian labour law defines as collective all forms of notice that are not related to the individual person of the employee, and that concern within a period of 60 days at least 10 employees (for enterprises with 20 to 100 employees), 10 percent of the workforce (for enterprises with 100 to 300 employees), or 30 employees (for firms with more than 300 employees). In case that an employer wants to resort to a collective dismissal, he has to comply with the following information or consultation procedure:

1) The employer has to inform workers representatives (the works council or the trade union delegation in the firm; or, in absence of either, the workers themselves) about the planned redundancies. This includes the reasons for the redundancy, the number and categories of

32 Article 63 of the Labour Code formally only applies to manual workers, but in practice is also applied to salaried employees.

33 See for example Article 40 of the Labour Code which stipulates that a pregnant woman cannot be dismissed from the moment the employer knows about her pregnancy until one month after the maternal leave she is legally entitled too. In case the employer does dismiss her during that period, she is entitled to a severance pay equal to 6 months of gross wage.

34 Data from Eurostat http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-NK-06-017/EN/KS-NK-06-017-EN.PDF.

workers involved, the period over which the redundancies will be carried out, the criteria that will be used in selecting employees for dismissal, the method of calculating the redundancy pay;

2) The employer must consult the works council and/or the union delegates about possibilities to avoid the planned redundancies, and of mitigating the consequences (e.g. measures for

supporting, redeploying and retaining the dismissed workers). However, an agreement between the employer and the employees’ representatives on the redundancies and an accompanying

‘social plan’ is not mandatory; and

3) The employer has to inform the director of the regional employment office (VDAB, FOREM, BGDA-ORBEM, ADG), about the proposed redundancies and to send a copy of the information letter that had to be provided to the employees’ representatives.

There are a number of national collective agreements that govern the aspects of reemployment. In 1992 an agreement was concluded that governs the methods used in outplacement and specifies the role of the trade unions in supervising the employers’ choice of outplacement office.³⁵ In 2002 this was followed by an agreement that made it mandatory for employers to arrange outplacement for all workers aged over 45 with at least one year of service.³⁶ Up to that date outplacement was only arranged on a voluntary basis. Industry-based collective agreements can further extend this right.

Since devolution of labour market policies, different practices have emerged in the 3 regions. The regional employment offices (VDAB, FOREM, BGDA-ORBEM and ADG) have set up Regional Reemployment Units (tewerkstellingscel - cellule sectorielle pour l’emploi, RRU) with varying roles. In the Flanders Region the reemployment unit is presided over by the director of the district-level employment agency and includes representatives of employers, employees, the industry-wide training fund (sectoraal opleidingsfonds), the redeployment fund (herplaatsingsfonds)³⁷, the

outplacement office (herplaastingsbureau), and of the SERR (a parity based advisory council at the regional level). The reemployment units are financed by a special employers’ contribution. For example, Vormelek-Formelec, the reemployment unit of the electro technical industry, is financed by a levy of 0.75 percent of gross wages.³⁸

In case of a collective dismissal, the redundancy payment amounts to half of the difference between the net wage, and the statutory unemployment benefit that the employee is entitled to. There is a maximum ceiling for the net wage that is taken into account. In April 2006, this maximum ceiling was set at a gross wage of 2,731 euro reduced by social security contributions and income tax.

Employers have to pay this extra benefit for a period of up to four months.

35 CAO No.51 of February 10^th 1992.

36 CAO No.82 of July 10^th 2002.

37 Redeployment funds are financed by state subsidies and industry funds.

38 Source: www.vormelek.be

In the event of the closure of an enterprise and the employer defaults, the Redundancy Payments Fund (Fonds tot vergoeding van de in geval van sluiting van ondernemingen ontslagen werknemers often abbreviated to Fonds Sluiting Ondernemingen or FSO) pays the employees who are dismissed (Table 3.3). The fund was set up under the auspices of the National Employment Office (RVA). It is administered by a management structure similar to the RVA, and is financed from levies payable by employers. The levies vary from to year to year, and according to industry branch and the size of the enterprise. But in general they tend to amount to some 0.25 percent of gross wages.

The FSO played an important role in the compensation of the employees of the defaulting national airline carrier Sabena in 2002. It compensated 11,322 employees by paying a total sum of 13 million euro in extra benefits in 2002. In more ‘normal’ years, it compensates between 4,000 and 7,000 dismissed employees with an annual budget of 5-7 million euros. In addition, the FSO also sometimes pays supplementary early retirement benefits, temporary unemployment benefits (benefits paid to employees whose employment contract is temporarily suspended), and so-called bridging benefits (benefits that bridge the period between a defaulting employer and the new employer after the bankrupt firm underwent a restart).

Table 3.3: Benefits paid by the Redundancy Payment Fund

2001 2002 2003 2004 2005

Redundancy payments in case of enterprise default Number of beneficiaries

Total amount paid out (x 1,000 euro) 3,840

4,979 11,322

Total amount paid out (x 1,000 euro)

562

Total amount paid out (x 1,000 euro) 106,765 130,302 141,054 129,626 131,578 Supplementary early retirement benefits

Number of beneficiaries

Total amount paid out (x 1,000 euro) 4,902

19,031 5,491

22,115 5,021

21,083 4,535

19,392 3,973 17,531 Source: Annual Report of the RVA 2005.